Trend Micro posted consolidated net sales of 13.39 billion Yen (or US $126 million, based on an exchange rate of 106 JPY=1USD) and operating income of 5.25 billion Yen (or US $50 million) for the fourth quarter of 2003. These figures reflect increases of 14% in net sales and 18% in operating income compared with the same period a year ago. Net income increased 58% in the fourth quarter compared to the same period a year ago. Growth for the quarter came mainly from Europe at 24%, Asia-Pacific at 20% and North America at 16%.

Net sales for 2003 surpassed previous years at 48.09 billion Yen (or US $454 million), reflecting an increase of 12% from 2002. Operating income was 15.2 billion Yen (or US $143 million), up 9% from 2002. Net income was 9.3 billion Yen (or US $87.3 million), up 20% from 2002. The company plans to pay cash dividends of 1.8 billion Yen, or 14 Yen per share, for 2003. All regions worldwide experienced growth in 2003 and enterprise products and solutions comprised almost 80% of total revenues for the year.

"In 2003 we delivered several new products and services, forged key alliances, and won many key endorsements making Enterprise Protection Strategy and outbreak prevention a reality for our customers,” said Steve Chang, CEO and co-founder of Trend Micro, Inc. "2004 will continue to be a year of growth for Trend Micro as we build on our expertise of threat knowledge and deliver new technologies that help customers more efficiently fend off threats to their networks.”

Based on information currently available to the company, consolidated net sales for the first quarter ending March 31, 2004 is expected to be 12.2 billion yen (or US $115 million). Operating income and net income are expected to be 3.6 billion yen (or US $34 million) and 2.1 billion yen (or US $20 million), respectively.

Fourth Quarter Business Highlights

During the fourth quarter, Trend Micro NeatSuite™ was awarded "Editor’s Choice” for 2003 by Network Computing Magazine; PC-cillin™ Internet Security 2004 desktop product was named CNET’s "Editor’s Choice”; and Spam Prevention Service was voted among "Products You Love” by readers of Microsoft Certified Professionals Magazine.

Trend Micro was also honoured with the Porter Prize for 2003 for achievements in the implementation of unique strategies based on innovations in products, processes, and management methodologies. Trend Micro Japan’s consumer support centre was also awarded the Helpdesk Institute Team Excellence Award 2003.

TrendLabs™ headquarters in the Philippines achieved COPC-2000 Standards certification from the international Customer Operations Performance Center organization, making Trend Micro the first antivirus software company to achieve this certification. The TrendLabs facility in Lake Forest, California, received Support Center Practices certification in recognition of world-class support and focus on customer satisfaction. Additionally, ScanMail™ for Microsoft Exchange 2000/2003 was the first Microsoft Exchange antivirus product to be certified on Microsoft Windows 2003 Standard Edition, Enterprise Edition, and Data Center Edition, running on Exchange 2003.

During this period, Trend Micro introduced several new products, including: Trend Micro GateLock™ 3000 and GateLock 5000 Remote Appliances, in a partnership with NetScreen Technologies, Inc.; PC-cillin Internet Security 2004; and several specialized products designed for the small and medium business customer (released in North America). In November 2003, Trend Micro announced its collaborative efforts with Cisco Network Admission Control Program to increase security within the enterprise.

Notable customers won during this quarter include: Brasil Telecom, Brazil’s largest telecommunications provider; Bital, Mexico’s largest retail bank; Kohl’s Department Stores, one of the fastest growing retailers in the United States; and EMI Music, the world’s leading music publisher, headquartered in the U.K. New business has also been established with Honeywell, the U.S.-based diversified technology and manufacturing leader.

Notice Regarding Forward Looking Statements

Certain statements that we make in this release are forward-looking statements. These forward-looking statements are based upon management’s current assumptions and beliefs in light of the information currently available to it, but involve known and unknown risks and uncertainties.

Many important factors could cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include:

Difficulties in addressing new virus and other computer security problems

Timing of new product introductions and lack of market acceptance for our new products